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http://seekingalpha.com/article/404...-results-earnings-call-transcript?part=single
We will now begin the question-and-answer session. And the first question comes from David Ross with Stifel. Please go ahead.
David Ross
Yes. Good afternoon everyone.
James Welch
Hi David.
David Ross
Jim, could you, I guess talk about maybe the consolidation of the Holland facilities into New Penn and YRC, I read about somewhere last week and also streamlining some of the middle management structure in terms of – I guess, continued to match freight volumes with labor and everything?
James Welch
Sure, I would be happy to. Number one, we have not consolidated anything from a physical network structure and to anyone of the other companies, all four companies today remain independent. What we did do however, was take the opportunity to realize the improvements that we have had from process, improvements in technology to right size our business, which we consider kind of a normal course of business. Certainly, the adjustments that we made were certainly carefully analyzed and we used a consistent methodology across all four operating companies that really centered on span of control, number of direct reports and things like that. So we certainly took all into consideration. We only made any sort of decision once we knew that we are certainly clear from a cost and service benefit to help our business out. But there is really no network integration at all. There could be some facilities where we have the capacity to share and we will be looking at some things like that, but really just a normal way rightsizing of the business, which we were happy to be able to do from the improvements that we made with our technology and processes.
David Ross
Okay. So that’s not as if you are shutting down some facilities in Holland, you put that freight in New Penn and YRC Freight?
James Welch
Not at all. Nothing can be further from the truth, no, nothing at all. I want to be real clear. Nothing is being done to change the physical structure of the networks Holland, New Penn, Reddaway, YRC Freight, all operating independently, so we haven’t wrote that article, didn’t quite have that right.
David Ross
Okay. And then as far as some overhead reduction, any quantification of potential benefits here in 2017, maybe a tailwind at YRC Freight for $5 million, $8 million, $10 million?
James Welch
We certainly think we will have some benefit, but we don’t think the overall dollars will be material.
Darren Hawkins
YRC Freight employees have the right attitude about being safe, being reliable and making a difference for themselves, our customers and our communities. I appreciate all of their actions that continued to move us in the right direction in 2016 and for the execution focus on 2017. Thanks for your time this afternoon.
We will now begin the question-and-answer session. And the first question comes from David Ross with Stifel. Please go ahead.
David Ross
Yes. Good afternoon everyone.
James Welch
Hi David.
David Ross
Jim, could you, I guess talk about maybe the consolidation of the Holland facilities into New Penn and YRC, I read about somewhere last week and also streamlining some of the middle management structure in terms of – I guess, continued to match freight volumes with labor and everything?
James Welch
Sure, I would be happy to. Number one, we have not consolidated anything from a physical network structure and to anyone of the other companies, all four companies today remain independent. What we did do however, was take the opportunity to realize the improvements that we have had from process, improvements in technology to right size our business, which we consider kind of a normal course of business. Certainly, the adjustments that we made were certainly carefully analyzed and we used a consistent methodology across all four operating companies that really centered on span of control, number of direct reports and things like that. So we certainly took all into consideration. We only made any sort of decision once we knew that we are certainly clear from a cost and service benefit to help our business out. But there is really no network integration at all. There could be some facilities where we have the capacity to share and we will be looking at some things like that, but really just a normal way rightsizing of the business, which we were happy to be able to do from the improvements that we made with our technology and processes.
David Ross
Okay. So that’s not as if you are shutting down some facilities in Holland, you put that freight in New Penn and YRC Freight?
James Welch
Not at all. Nothing can be further from the truth, no, nothing at all. I want to be real clear. Nothing is being done to change the physical structure of the networks Holland, New Penn, Reddaway, YRC Freight, all operating independently, so we haven’t wrote that article, didn’t quite have that right.
David Ross
Okay. And then as far as some overhead reduction, any quantification of potential benefits here in 2017, maybe a tailwind at YRC Freight for $5 million, $8 million, $10 million?
James Welch
We certainly think we will have some benefit, but we don’t think the overall dollars will be material.
Darren Hawkins
YRC Freight employees have the right attitude about being safe, being reliable and making a difference for themselves, our customers and our communities. I appreciate all of their actions that continued to move us in the right direction in 2016 and for the execution focus on 2017. Thanks for your time this afternoon.
